Predictive Analysis Suggests Nasdaq Spike in 2025: Two AI-Driven Stock Split Shares Worth Investing in as Perceived by Financial Experts on Wall Street
The Nasdaq Composite (^IXIC) had an impressive 29% surge in 2024, with history suggesting it might carry this momentum into 2025. Since its inception in 1971, the Nasdaq has shown a pattern of gaining over 20% in 20-year periods. After such growth spurts, the tech-centric index typically sees a 16% increase in the following year.
This trend could hold true for 2025 as well. However, Wall Street analysts are particularly optimistic about Nvidia (NVDA) and Lam Research (LRCX). Both companies conducted 10-for-1 stock splits in 2024, which is believed to spur additional interest from investors.
Nvidia, known for its graphics processing units (GPUs), has a high chances of thriving in the data center transition from general-purpose computing to accelerated computing, including AI infrastructure. Analysts predict a 50% increase in Nvidia's adjusted earnings over the next four quarters, making the current valuation of 57 times adjusted earnings appear relatively affordable.
Lam Research, a leader in wafer fabrication equipment (WFE), is poised to benefit as the world becomes increasingly reliant on semiconductors. With a reasonable valuation of 24 times earnings, analysts expect a 15% increase in Lam's earnings over the next four quarters.
1. Nvidia
Nvidia specializes in accelerated computing solutions spanning hardware and software. The company is renowned for its graphics processing units (GPUs) and provides central processing units (CPUs) and networking equipment as well. Nvidia's GPUs are the standard for data center accelerator chips, especially in the AI domain.
The company also offers an ecosystem of software development tools called CUDA, along with subscription software products built on its CUDA platform. These tools make it simpler to develop AI applications across various industries, giving Nvidia a significant edge over competitors.
2. Lam Research
Lam Research develops wafer fabrication equipment (WFE), which is essential for semi-conductor manufacturers to transform silicon wafers into chips. The company is a leader in etch equipment and ranks second for deposition equipment behind Applied Materials.
Lam Research's scale is an essential competitive advantage in the capital-intensive WFE industry. This enables the company to invest heavily in research and development to stay at the forefront of semiconductor manufacturing equipment technology.
In conclusion, both Nvidia and Lam Research are well-positioned to thrive in the growing demand for AI infrastructure and semiconductors, respectively. With an expected 24% annual growth in data center accelerators through 2030, Nvidia should witness significant growth. And given the increasing reliance on semiconductors, Lam Research is likely to maintain its market share.
- Investors interested in finance and the technology sector might consider adding Nvidia (NVDA) to their portfolios in 2025, as analysts predict a 50% increase in its adjusted earnings over the next four quarters.
- Wall Street analysts are also bullish on Lam Research (LRCX), given its leadership in the wafer fabrication equipment (WFE) market and reasonable valuation of 24 times earnings, suggesting a potential 15% increase in its earnings over the same period.
- The Nasdaq Composite's 29% surge in 2024 and its historical pattern of gaining over 20% every 20-year period have investors looking at potential stocks like Nvidia and Lam Research to benefit from this momentum, with 2025 being a promising year.
- While the average investor may be focused on the overall market trends and momentum, granular analysis of individual stocks like Nvidia and Lam Research shows promising growth prospects due to their specific position in the tech and semiconductor sectors, respectively, as per analysts' predictions.
